66 - Aayush Jha: Clean Air as a Service: The Future of Indoor Environments?

The revolutionary "clean air as a service" business model is transforming how we approach indoor air quality in challenging environments. 

Rather than simply selling filtration equipment with uncertain outcomes, companies like Clairco are guaranteeing results through a comprehensive system of monitoring, analytics, and accountability.

Aayush Jha, Clairco's co-founder and CEO, reveals the fascinating inner workings of this approach that promises clients indoor air quality that's 90% better than outdoor conditions. The conversation explores how buildings typically deteriorate from their designed performance after 5-7 years, creating gaps that standard equipment sales cannot address. By taking full accountability for outcomes, air quality service providers develop solutions tailored to each building's unique challenges.

The model depends on sophisticated IoT monitoring networks measuring everything from particulate matter to pressure differentials, coupled with AI-driven analytics that optimise system performance. What makes this approach particularly compelling is the deep relationship it fosters between service providers and clients - both parties must uphold their end of the agreement for success. Clients follow operational guidelines while providers maintain all equipment and continuously verify performance.

While currently most viable for larger commercial buildings (100,000+ square feet), this accountability-focused model offers valuable lessons for improving air quality in any space. The three fundamental principles he identifies - comprehensive data collection, appropriate filtration selection, and proper fresh air management - form the foundation of effective air quality management regardless of scale.

This episode pulls back the curtain on an innovative business approach that aligns incentives around actual health outcomes rather than equipment specifications. For facility managers, building owners, or anyone concerned with indoor environments, it demonstrates how the future of air quality management lies in guaranteeing results, not just selling hardware.

Aayush Jha - Linkedin

Clairco

Chapters

• 0:00 Introduction to Air Quality as a Service
• 4:37 Understanding Clean Air as a Service Model
• 12:52 Building Challenges and Air Quality Management
• 21:50 Accountability in Air Quality Delivery
• 30:37 The Technology Behind Air Quality Monitoring
• 44:28 The Six Key Components of Air Quality Service
• 54:54 Client Relationships and Compliance Factors
• 1:14:12 Building Scale and Future Industry Development
• 1:24:57 Three Fundamental Principles for Better Air

Transcript

Simon: 0:00

Welcome back to Air Quality Matters. We already have the tools and knowledge we need to make a difference to the quality of the air we breathe in our built environment. The conversations we have and how we share what we know is the key to our success. I'm Simon Jones and coming up a conversation with Aush Jha, co-founder and CEO of Clerco, a clean air as a service company. One of the fascinating things about as a service models is the laser focus it requires across the business on delivering what matters. It requires outcomes to be stitched into the very DNA of the business and drives incredibly deep relationships with customers as a result. History has taught us that in business and more broadly, there is a lot to learn from companies that take this route, so I was fascinated to talk to Ayush about Clean Air as a Service, how they measure success, manage risk and construct a business to deliver clean air at scale in environments like India and the Middle East.

Simon: 1:20

Now, the sounds not great on this episode, and that's on me, I'm afraid I didn't pick it up during the conversation, so I promised to sit down with Aish again when I'm in India in the summer to chat with him more.

Simon: 1:33

Even so, there's some fascinating insights here on this one and I think well worth sticking with it. So don't forget to check out the sponsors in the show notes and at airqualitymattersnet. This is a conversation with Ayush Jha. I mean, generally, I think what's really interesting about air quality as a service is what makes any as a service model interesting, and that is both in how you define the value proposition to customers, because it's a different proposition, isn't it, to selling equipment, um, but it's also a very different proposition as a business, delivering on a promise as an as-a-service model compared to delivering as a promise on a piece of equipment, and I thought that would be the interesting thing to talk about from an air quality perspective, because we haven't really had that conversation. So, from your perspective, do you think there's some broad lessons that you've learned and the industry can learn from the practicalities of delivering air quality as a service?

Aayush: 2:54

Absolutely, simon. First of all, thank you so much for having me here, and this is something which is very close to us and we've been working on it for the last seven, eight years now very close to us and we've been working on it for the last 7-8 years now. So, if I just focus on, why are we looking and why are we doing anything around clean air as a service? Why are we even thinking about it? Why are we not just selling hardware? Why are we not selling the air quality monitors and the air filters? The basic difference between us and most of the companies that we've seen out there is that we are not trying the air quality monitors and the air filters. The basic difference between us and most of the companies that we've seen out there is that we are not trying to sell our hardware. We are promising an indoor air quality limit. So, irrespective of what happens in the building in general uses, we'll ensure that the indoor air quality is 90% better than the outdoor air quality. How we do that is also very interesting, but before I answer that, what's important to understand, simon, is that each building is different in nature.

Aayush: 3:56

Each building will have different characteristics. Some buildings will have a higher positive pressure in a building. Some buildings will not have a perfect HVAC system. Some buildings will have ventilation systems. Positive pressure in a building. Some buildings will not have a perfect edge pack system. Some buildings will have ventilation systems that were designed for something else but are not really performing that well. They are subpar compared to when they were designed for it. So there are multiple issues that go in a building. Just by selling a product which is a plug and play, it will not truly honestly solve the problem in all the buildings. So almost 90-95% of the buildings that we go to say after five years, six years of that building being launched and it's already occupied, it doesn't necessarily work as it was designed to work. You know you have certain problems. So this is something that we've seen in India and also in UAE. We are also in Dubai as well. The buildings were designed for, you know, say, a lead platinum or lead gold, but genuinely, after five, seven years, we see that they're not coming to that level. That's why it's telling our air filter or anything else will not solve the entire problem.

Aayush: 5:04

What we need to do is need to genuinely understand that building and then figure out what all needs to do what needs to be done, and it's very important, simon, that we understand the basics of air quality management. The basics of air quality management. I believe something that is more important than just the air filter which we are installing in the air conditioners or the HVAC is the maintenance of positive pressure in the building. That is extremely important. According to Ashtey's guidebook, we need to maintain at least 2 to 4 pascal of positive pressure in the building at all times. You might also be aware, simon, that if you pump in too much air in a building, the amount of energy it will consume to cool that amount of air or heat that amount of air will be exponential compared to using the same stale air again and again, because maintaining that temperature will be far easier. So hence, we need to understand what amount of fresh air are we taking, what kind of filtration are we doing and where?

Aayush: 6:04

All we need to understand what amount of fresh air are we taking, what kind of filtration are we doing and where. All we need to do the monitoring properly. And this, the entire consulting approach to this, is very difficult when we're trying to do a hardware sell. That's why clean air as a service stitches all these three things perfectly, and we are able to design these things as per the client's requirement in that building. And are able to design these things as per the client's requirement in that building. And extremely important to our clean air as a service is the promise and in fact that is our tagline as well signed that we guarantee indoor air quality In most buildings. We promise that your air quality will be 90% better than outdoor air quality across the year. In some buildings which are already functioning better, we can guarantee them WHO level of air quality as well or well-building guidelines of air quality as well.

Simon: 6:54

Yeah, that's interesting. I mean, there's a couple of really interesting points for me there. One is this fundamental difference of having to stand over an outcome rather than the potential of an outcome, because often when we're selling products into the built environment it comes in different parts. There's there's the promise of the performance from a design, you know so, a consulting engineer or a real estate developer or whoever's involved in the delivery of that building. There's the promise of the outcome. You know the theoretical performance of that space, and then the equipment manufacturers will provide equipment that offers a promise of performance based on the design. And then usually there's some loose promise of performance wrapped up in defect warranties and you know liabilities of the building in the short term. But very quickly all of that evaporates away and immediately then it kind of finds itself in the operational side of the business, where the maintenance teams then usually have very standardized ways of just keeping buildings running and, depending on the quality of the building, often that's almost a run to failure type scenario where stuff just gets fixed if it's broken. You know, um and I complain about this a lot on on this podcast for those that listen to me is that we we tend to run to failure ventilation and he vac in the. I mean, we do service air conditioning units because there's an obligation to, but beyond that, very rarely do you see people going around measuring air flows and measuring performance of ventilation systems.

Simon: 9:01

But an as-service model is fundamentally different. It almost doesn't care about any of that stuff beforehand. What counts is contractually are you delivering on a promise, are you delivering on an outcome? And your job is to tie all of that stuff together in order to deliver that. And it seems like a subtle difference, but it's actually a fundamentally different one, because there's no excuses, absolutely. You live and die on the promise of the performance, don't you? It doesn't matter if you're struggling to get filters from the supply chain or not. That's not the client's problem. Your KPI is the delivery of that performance of the system. And the other interesting thing you mentioned there was the fact that we can view this through different lenses. You can view the promise of performance, of a differentiation from what's outside. You know this 90 better than outside model or a threshold. You can say look, there's a standard that we can target and we can promise to to meet that standard. But either way, it's a very defined kpi and you.

Aayush: 10:20

You're held accountable, I guess absolutely, simon, and accountability is at heart of Clareco. In fact, when we were starting the company in 2018, we were very clear what are the issues that we see in indoor air quality management. The biggest problem that we saw is that people don't understand the air quality in real time because we can't feel it that quickly. That's why we need IoT-based air quality in real time, because we can't feel it that quickly. That's why we need IoT-based air quality monitor and that's where we start manufacturing IoT air quality monitors. It measures all your particulate matter 2.5, particulate matter 10, carbon dioxide, pvoc, carbon monoxide. If you need SOX, nox and you name it, we have 14 possible sensors that we can sell, and we can have it in a single box as well, if required. That was very important to understand genuinely what the air quality is in real life.

Aayush: 11:14

And then second part was to have accountability to it. For example, some of the larger air filter OEMs. Their aim is to sell that air filter toEMs. Their aim is to sell that air filter to the building. It is impossible for them to predict exactly when do they need to change the air filter. There's a possibility that the air filter was installed in New Delhi, where the air quality is horrible. And if the same air filter is installed say probably where you are where particulate matter matter, probably in single digits the OEM will push or notify you to change the filter at the end of the year, right? Or the agent, sales agent or whoever it is, but then that is not really backed by any sort of data.

Aayush: 12:03

It is a very broad assumption that in a year you should replace your air filter, but then again, simon, if you think of it, we are either wasting the filter which could have been run for another year in Ireland, or either changing the filter in Delhi too late. Either of the two scenarios are happening. With the same air filter, same model, same number of run hours, everything there. But the dust holding capacity of the air filter is similar, it is fixed, but the dust which is there in the New Delhi air filter would probably be 20-30x of what you have in Ireland, so hence there are so many moving parts to it. It's important to have it as a service and what we realize is that if we have different OEMs selling different hardware, it's always easy and confusing to understand accountability. This is where we were very clear that we will always be a company that is accountable for what we provide for. Hence, outcome as a service was extremely important to us Like.

Aayush: 13:06

I mentioned earlier.

Simon: 13:08

And let's break that down, sure, please go ahead.

Simon: 13:13

Yes, sorry, I think we had a slight interruption in the service there. I think what's fascinating here is to break this down a little bit to truly understand what it means to deliver air quality as a service. And from what I understand of as-a-service models, there are some things that have to stack up in order for this to work. And fundamentally, because at the heart of it is this accountability thing you are taking a risk, you are being held accountable for an outcome, so normally there has to either be scale or profitability or clearly defined outcomes, something that's measurable in order to be able to make this work. So I'm assuming it's no different for you. There's some fundamentals here that have to be in play for this to be a model that works financially, both for you as a company and for a client financially, both for you as a company and for a client. And from our discussion, the first thing is scale.

Aayush: 14:35

Is that?

Simon: 14:35

at the moment, you're delivering this to fairly large buildings. I would say you need a certain scale in order for this to be an effective model for a customer.

Aayush: 14:42

Simon, the smallest building that we will work with is at least 100,000 square feet.

Simon: 14:50

Anything below.

Aayush: 14:50

that is not that interesting, but we work with a few companies which have a chain of multiple buildings across the country which are around 50,000, 60,000 square feet. That's also comfortable for us, provided the entire client is around a million or bigger than that.

Simon: 15:07

What does that mean fundamentally? What's the importance of the scale? Is it the amount of equipment and infrastructure and capital spend that you're putting in? Is it the volume of air and the value? Are you effectively defining a value per cubic meter of air that you have that makes this worthwhile? Um, there's some metric, I guess, somewhere behind all of this that says at a certain point, this becomes workable absolutely.

Aayush: 15:37

There are two important things here we need to understand. First is a relatively larger building. Uh, in our experience, what we've seen in india are designed in a better way. There are little more intelligence that goes into it, because these buildings usually go for some level of usdbc certification, some league certification etc. So hundred thousand to two hundred thousand square feet building we've seen usually have come with these certifications. So when you have certain certifications, there's a class of a building that you're trying to understand and target. This building will have a treated air chest, will have some sort of ventilation system that will work, will have some levels of air handling unit which can sustain a particular static pressure, levels of air handling unit which can sustain a particular static pressure. When you increase the filtration level, you are basically increasing the entrance to airflow or the pressure in the air handling unit, and these things are important. That's where size of a building helps you reach out to those clients where you already have these basics figured out. That's really interesting.

Simon: 16:46

Yeah.

Aayush: 16:48

Finally, the second point that you touched upon is also very, very important for us. It's important to have a scale in the size, because we're always taking some amount of debt from the market while launching it at a client Say, for example, a 200,000 square feet building will take some debt from our. Say, for example, a 200,000 square feet building We'll take some debt from our partners, some credit and work on that, and we'll break even in, say, two years, two, two and a half years or so. What's important is that, on day one, most of the cost is borne by us. So the IoT devices we're talking about.

Aayush: 17:22

So what are the IoT devices? We have the air quality monitor, then we have the differential pressure transmitter and we have a smart switch that controls the treated fresh air systems. How much fresh air are we bringing in? And now we've also started adding people counters and entry and exit.

Aayush: 17:40

These IoT sensors help us understand the number of people in a space. They help us understand the carbon dioxide levels or other gas level in real time, and, because we're controlling both the air handling units and the treated fresh air systems, there's a lot of data that we need to generate and hence we need to have this IoT. Along with this, we are talking about multiple different air filters that we like to add in the air conditioning system. That also costs at a particular cost, at a particular price. Hence, we need that data. So these are the two things that are very important Minimum size from a financial capability standpoint, and secondly, minimum size so that these companies or these buildings should have some certifications, because we don't want to start from scratch. We want to start from a building which is having at least bare bones ready and is working at a certain level at least.

Simon: 18:33

That's really interesting and I wonder if those two lines differ the scale from a financial perspective you know the fundamentals of making it work and the scale from a quality perspective, that you've noticed that below a certain size we start to lose some of the quality assurance that you might get with some of the bigger buildings, with some of the standards that they might have needed to achieve.

Simon: 19:00

And perhaps there's a lesson in there to real estate that you know by limiting the quality of HVAC and ventilation systems in buildings because of scale and size, you limit the potential of opportunities like this down the road because the building just isn't capable of adopting advanced ventilation and HVAC practices, of adopting advanced ventilation and HVAC practices because you've decided at your 20,000 square foot building that it's not worth putting anything fancy in. You know, and all of a sudden you're limiting potential down the road. That's an interesting observation that actually that it's not just a scale of delivery of clean air, it's actually below a certain scale. We see the quality of the HEVAC drop off or the quality assurance drop off that it makes it difficult for us to stitch in these solutions.

Aayush: 19:54

Absolutely, Simon, because it's important to understand how old is the building. The older the building, it might have more leakages. It might have lesser or zero positive pressure. There's a possibility that the building might have no fresh air systems or might have fresh air systems that worked 10 years back don't work anymore. So we've seen all these buildings that are there. Also, what we noticed is that there are some developers who have spent more time and effort and genuine mind space in maintaining better indoor air quality or indoor environment quality. It's easier to work in those buildings compared to some of the other developers where we continue to struggle with basics yeah, yeah, and um, I thought there's something else there.

Simon: 20:44

What was it? The? Um, yeah, I just I'm guessing also there's a, because this is relatively new. You also need confidence on your side that you're going to be able to deliver this. So perhaps with time you might start stretching out into some of those educators. But at the moment you want fairly safe bets from an as a service model. You don't want to be taking undue risk in these complex financial models. So I guess there's a little bit of that. Have you found practically through your assessments? There are buildings you're having to walk away from because of age or quality of evac install and say, look, sorry, we'd love to, but this building's just not in a place where we can help you.

Aayush: 21:34

Absolutely, simon. Unfortunately, over a quarter of the buildings we visit we cannot launch there. And our clients are these larger, larger, you know, larger global companies that have presence in india and uh, usually they have decent buildings, but still in the building there are certain things that need to be sought out. For example I'll take a random example uh, let's and take an example of someone, say, like a visa, fairly large company working out of a very good facility, and the problem is the occupier or the tenant can only do, say, 5 out of 10 things. The rest of the 5 out of 10 things now need to be done by the developer. We need approvals from the developer. So it adds to the structural problem as well. That's why a client which had a larger building or had the larger chunk of the building will be able to move things faster If it's a single tenant building. Imagine a very large, say a 500,000 square feet building where you only have one tenant.

Simon: 22:42

Managing that building will be far easier from a permission standpoint yeah, yeah, no, absolutely, and like so that must be quite a shock, I imagine, to people that are engaging with you to to be told I mean, it must be quite a shot across their bow to be engaging with a very proactive company, um, and for you to turn around and say, look, I'd love to work with you, but for these reasons we just can't help you. Uh, how do those conversations go like? When you're saying, look, you know if you can get these things in place? Like, is some of the stuff fixable? Are you able to say to people, look, come back to us if you can get the building to here, or are most of those quarter just write-offs? There's no chance that building is that is certainly for the short term is going to be in a position where you can help them.

Aayush: 23:35

Simon, almost all the things that we see which don't work with us, it's just possible to fix them. It's a human problem rather than a mechanical or a building physical level problem. It's a human problem. There'll always be a struggle between the developer and the tenant, like who pays for what, and that takes a lot of time for these guys to come on the same page and start working towards it.

Aayush: 24:05

So that's one of the bigger problems and say, for example, if you get a building which is owned by a building and say, for example, if we work at a building which is owned by a building sorry, owned by a company that also occupies the entire space usually launching there is super quick because we don't need permission, we don't need to speak to different OEMs that are doing AMCs, et cetera. Everything just falls in the line based on those scales. So EMCs, etc. Everything just falls in the line based on those scales. So that's a human problem rather than a building issue.

Simon: 24:35

Yeah, I hadn't thought of that actually, and that's right at the heart of what we call this split incentive problem, isn't it Of owner-occupier and or tenant-landlord situations? I mean, you can have big buildings that have quite a complex split incentive structure with even different leaseholds within the same building, so different arrangements with the landlord depending on how long a tenant has been there. So you've got to unpack all of that and make that work. All of that and make that work. So it's so often.

Aayush: 25:11

It's that I'd like to highlight something here, simon, because when I say clean air as a service, it's a two-way service level agreement. I promise that I'll deliver on these things, but the client has to promise that they will use their air conditioning under these particular guidelines that we highlight, that they have to do X, y and Z as well. Unless and until they are not delivering on their part of the promise, it's impossible to maintain air quality. I'll take an interesting example, and it's also going to sound a little lame, but this is something that genuinely happens fairly often, simon.

Aayush: 25:49

In New Delhi, the temperatures in winters are often single digit in centigrade. Right, it's fairly cold, so there is no need for the cooling system to work. In India, the number of buildings that can heat a space are fairly low. I think at max it will be at 1% Should be lower than 1%, in my view. Right, because primarily we need to cool buildings. We don't need to warm buildings at any time.

Aayush: 26:18

So in winter most of the larger buildings do not use air conditioning almost at all, or might only use it for half an hour in a day, because just by circulating that cold air, people start to shiver and they feel uncomfortable. There's no thermal comfort there, but if you think about it, unless and until the air passes through the air filter which is installed in the air handling unit or in the HVAC, I will not be able to deliver on the air quality promise. Hence I mentioned that it's a two-way promise. Unless they run the air conditioning based on our guideline, there is no service limit and, thankfully, because we have a lot of IoT sensors, we have all the data how many hours was the air conditioning system working? What was the temperature? What were the CO2 levels? What were the different air quality levels across the building?

Simon: 27:13

uh, so we have to substantiate on that as well, and I think what you say there touches on. One of the key fundamentals as a of an as a service model is that deep client relationship that you have to build with customers in an as-a-service model, because in almost all service models, the, the outcome, is going to be so deeply tied to the use of that particular service. You know and we know this, we understand this fundamentally from things like jet engines. One of the first as-a-service models it was about air miles and the Rolls-Royce and people that delivered those models would work very closely with pilots to teach them how to get the most out of the engines and to fly them sympathetically, because it was in everybody's interest from a fuel use perspective and also a longevity of the engines perspective, critically important to getting good outcomes. Similarly, with military hardware, apache helicopters and so on, all of these things have deep-rooted client user relationships with the as a service model provider, because it's in everybody's interest to get a good outcome and I think that's that's at the heart of what's fascinating with air quality as a service is you find yourself at the bleeding edge of those relationships because it's the.

Simon: 28:53

It's the area that we've always struggled with with the built environment, is things around air quality and thermal comfort and use of hevac systems and heating systems and so on, is that you have to get. You've got no choice. You have to get that right because it's both a kpi in the satisfaction of the client, but a poorly educated client is going to, at the very least, um, water down the model profitability and, at worst, utterly destroy it. Um, so I imagine that's something, something you have a laser focus on, particularly with this being quite new is working very closely with people in buildings to get the outcomes they want, but also get the outcomes you want as well.

Aayush: 29:43

Absolutely, simon. So one of our clients, again in the national capital, in Delhi, promised all their tenants that they will have pristine air quality and they were charging a fair premium on their ventures to provide clean air. And it was a fairly decent large building. If I'm not wrong, almost around 900,000 square feet building grade A real estate right but their ventilation systems were ancient almost around 900,000 square feet building, grade A real estate right. But the ventilation systems were ancient in a way right. And because the client genuinely understood what our problems were, why would we not be able to promise them what they wanted?

Aayush: 30:25

These guys realized and they spent some time and money to help us fix those basics. For example, the ingress of air when someone enters a building. We ensure that there are two glass doors instead of one when someone enters and we had much stronger purification level between those two glass doors. That helped us reduce the ingress, the dust ingress, the PM2.5 ingress in that space, and the client was ready to invest in that. And these kinds of successes can only happen when you have that pristine connection with the client and the client is able to understand what needs to be done and is ready to walk the mile with you.

Simon: 31:10

Otherwise, these stories and as your relationship primarily with the deliverer of the space, or are you finding yourself developing relationships with the users of the space as well, starting to provide them with better ways of using their spaces? You know information sheets, and so are you finding yourself having a relationship with the actual users of the space, or is it primarily with the, the building owners, as it were?

Aayush: 31:44

it's an equal split. Simon um, I would say a lot of our clients are real estate developers who have a lot of grade A real estate, or some of them are occupiers themselves who have a decent amount of commercial real estate and they want to maintain air quality for their employees' well-being. So it's a proper combination of it. But also in cases where we're working with the developers, these developers usually like to market that they have clean air. So what we do is we put in these gigantic 60-70 inch TV screens at the entrance of a building where we showcase indoor and outdoor air quality deltas, which are usually around 90-95% 98%. So that is a very important communication layer with the end user. Of course, we are not able to speak to most people who are occupying the building, but the end client or the end tenant gets to know about the AI quality fairly often and I'm certain that most of the data reports that we share with our clients, the client also shares that with their tenants.

Simon: 32:54

Yeah, interesting. And what are the kind of buildings that you're finding yourself primarily going into? Is it mostly office space at this stage, or is it a whole broader sector of real estate than just offices?

Aayush: 33:15

broader sector of real estate than just offices. 70 is office spaces and, within office spaces, 60 should be large offices and 40 must be co-working, which will have a split here and there, which will have multiple properties in the city okay, for example, for example yeah, the biggest client that we have in India is WeWork.

Aayush: 33:34

We manage all their sites in the country. They have roughly 35 offices in the country and we manage our equity across and India for that. Similarly, apart from office spaces, airports and malls are also increasingly becoming important, because malls want to differentiate themselves with the mall in the next neighborhood, and airports, interestingly, are doing this to get all the certifications and win different awards so that they can increase their own clinical yield eventually as well.

Simon: 34:06

It's all tied up and are you, are you seeing any interest from the the kind of medical sector so, uh, from hospitals and health care that kind of thing, um, although you know, because traditionally they can be quite under-resourced sectors unless it's private health care. So that could be a challenge. And the other, and then also I was thinking kind of manufacturing, kind of pharmaceutical industries, process manufacturing, these kind of things, where again, clean air is quite a critical element of what they're doing sure, sure, so I mean.

Aayush: 34:42

So, um, we do not focus in healthcare and pharma for the simple reason number one that do you understand the concept of red ocean and blue ocean spaces? I'll quickly clarify. Imagine a space where you have too much competition and that is a market where you call it as a red ocean, and similarly, the blue ocean strategy is focusing on a space where you have relatively lesser players and you can carve out your own niche there as a red ocean. And similarly, the blue ocean strategy is focusing on space where you have relatively lesser other players and you can carve out your own niche and eventually build a large business out of that. So we are really moving towards that and we focus that. We will focus only towards office spaces and buildings, which were relatively lesser served from purification companies, large air filter companies, and we've seen decent growth there.

Aayush: 35:35

But now is the time where we just started focusing some of our energies in the hospital space as well. Unfortunately, hospitals still don't have the kind of compliance that need them to maintain the air purification that they should ideally have. Apart from the operation theaters and the ICUs, etc. These critical areas, all the other parts of the hospital don't have any filtration and hence the hospital-acquired infections are extremely high, and this is something that really needs to be taken care by these larger organizations that form compliances for hospitals. Unfortunately, in India, those compliances from an indoor air quality standpoint are still fairly archaic or weak, which needs to change.

Simon: 36:27

Yeah, no, I understand. I don't think that's a uniquely indian problem either. You know, I think generally the healthcare sector suffers from that quite generally, which is interesting. And it's interesting what you say about focusing on the the blue sky part of the ocean, the market blue ocean?

Simon: 36:45

yeah, yeah, exactly um. Has there been any interest in residential settings, some of the bigger real estate residential areas that may have centralized delivery of ventilation? I imagine that's quite rare, but perhaps in places like Dubai and other parts of the world might be more common. Is that something you've seen any interest in of?

Aayush: 37:11

the world might be more common.

Aayush: 37:12

Is that something you've seen any interest in?

Aayush: 37:14

So, in residential space, in the luxury apartment space, most buildings in India as well are centrally air-conditioned and on an average, these luxury apartments in India are retailing at around a billion dollars, so they have the budget to to spend on air purification.

Aayush: 37:33

So we've launched a product called refi cure. This is probably the only air purification system that also brings in fresh air while cleaning the air, and the entire purification system sits outside the wall of building, so it takes zero real estate and just has small vents, which is recirculating the air and also bringing in fresh air based on the air quality parameter, and it's the AI which decides how much fresh air to bring in, when to bring in. If people are sleeping, what is the sound decibel level that is acceptable a slight humming sound or a little more? Can we increase the volume of air, etc. Etc. There are multiple things that happens in a product called recipe, which has we launched earlier this year, and we're seeing decent interest in the luxury apartments in india right now yeah, interesting, and will that sit as a kind of an as aa-service model similar to what you're doing?

Simon: 38:30

Is that something completely that's a kind of a purchased product more? Yes, so what's happening here?

Aayush: 38:36

is Simon that we are selling to developers directly, and developers will install each of these devices in each home and they set to the end client. We almost never speak to the end client, apart from the mobile application that we have, which is a communication window with the end client.

Simon: 38:57

But we never have a financial transaction with them. Yeah Well, I mean, I can live in hope. The residential sector is so important for health and well-being outcomes long term that you could see as a service models, providing some benefit there at some point, but it seems like quite a long way off at the moment. Um, I mean one of the other benchmarks that I suppose is critically important, particularly when you're setting these fundamental kpis. Um, the first one that springs to mind is this delta t or differential uh between inside and outside from an air quality perspective. So that's a fundamental KPI of yours, particularly in India. You will look at average air quality, I guess, over the year or the seasons in a particular area and work out what you think you can promise from a kpi perspective. Is that how it works? You say, look based on the environmental conditions that this building sits in. This is our promise to you that it will always sit above this kind of level or, on average, 90, 90 percent of the time above this kind of level or something.

Aayush: 40:09

Precisely, simon, and a lot of times things also change when we're looking at hyper local pollutant levels. So what we've seen in some parts of the country, that particulate matter is a major pollutant in India, but there are certain spaces in some large cities where nitrogen oxides or sulfur-based oxides are also fairly high. In those cases, because we measure everything, our KPIs can only be based on everything if our contract justifies for that and the client is ready to modify their air conditioning systems or the HVAC to be able to take the kind of filtration that's required. Actually, all the hardware, all the air filters that we use, are Clerco-made, so it's easier to install all of them together, put them together and have a unified system where we are sharing data and taking actionable insights out of. But the client needs to really understand that as well.

Aayush: 41:10

Last, but very, very important, simon, is anything as a service should be a longer-term contract. A one-year contract is not interesting to us, simon. I would rather sign a five or seven-year deal with a client because we are able to provide, of course, the best price to the end client but also provide a better service, because we understand the continuity of that particular space, because when we take credit from banks et cetera, the interest and the cost of the hardware. It just makes it very unviable for us to have a one-year contract.

Simon: 41:46

Yeah, no, absolutely, and I think that just shows that you also need to fundamentally understand the environment that building sits in. So if you're in Delhi, for example, some buildings may really come under pressure from a stubble burning, particulate matter type, pm at certain times of the year, pm at certain times of the year, whereas other buildings in other parts of india may struggle more with traffic-based pollution and, like you say, the noxes and the sulfur dark sides if they're industrial areas. So you, you really are, you really do take account of where the building is, and is that something? You sit down then with the client in a consultative process and say look, this is what we find about the building that you're in, this is what we think we could do. What are the kind of benchmarks that we want to measure against? Is that a kind of a consultative process with the client, ultimately?

Aayush: 42:43

That is a very integral part of our client onboarding, simon. The client really genuinely needs to understand the status quo. What's the air quality right now inside their building and outside of their building? You might remember, in the call I explained that we also need to have an outdoor air quality monitor. It's extremely important so that we are able to understand the delta.

Aayush: 43:06

Apart from that, apart from the outdoor conditions I mean something that we've not spoken enough of or we probably should spend more time on, is what are the other indoor pollutants, or what happens that generates these indoor pollutants. For example, the usage of certain air fresheners in the washrooms right, the usage of, you know, some sort of a cleaning equipment or spray that we do, the housekeeping does. That generates a lot of VOCs, formaldehyde, benzene, taudine, etc. Different kinds of organic gases.

Aayush: 43:40

We sometimes have to sit with our clients, especially in the retail space, because a particular perfume or a fragrance is what they add. So they have their brands, which come up with the smell as well. Right, it's just not the ambience. The smell is also integral part of it, so that's also an important factor. At an airport and at a very large, a million square feet mall in India, the client had to spend a lot of time in changing their framework, which is also approved by us, which does not generate VOCs. These are relatively more herbal, more natural substances that they're using, compared to the chemical ones they were using earlier.

Simon: 44:26

I'll have you back to the podcast in just a minute, but I wanted to tell you briefly about Imbiote, a partner of the podcast. I came across Imbiote a while ago and, in fact completely unrelated to the podcast had been trying out some of their sensors here in my office, which I still have here today, and with customers. I was seriously impressed then and remain so. Imbiote are a multidisciplinary team with a common goal to promote healthy and sustainable interior spaces. They manufacture smart indoor air quality monitors and an exceptional cloud platform. I get to see and use many products, as you can imagine, and Imbiote stands out here. And use many products as you can imagine, and Imbia stands out here. The quality of the product, the innovation they bring with sensors and connectivity options and a platform with some unique approaches to reporting and integration with many of the reference standards in the sector, like Reset Well Lead and others in the sector. Like Reset Well Lead and others, their devices can also be integrated to any building to control and automate the operation of HEVAC systems, ensuring optimal air quality and energy savings. Details are in the show notes, as always, and at airqualitymattersnet and at Inbiot. That's I-N-B-I-O-T dot E-S.

Simon: 45:54

Now back to the podcast and we've talked a lot about the proposition and I think we had to because it's like I say, it's quite unusual for a business to be as a service from an air quality perspective. So I think it's been really interesting to understand the value proposition here for clients and I think, fundamentally, if people are able to pin a, an improvement compared to outdoor conditions or tie it to a particular standard or you know well, or a wh or whatever is determined as achievable, I think that's great. I think people can instinctively get why that has value. What is it, I think, for listeners to understand? Like, typically for a client that works with you, what are the component parts of this for them?

Simon: 46:48

You've mentioned air quality monitors and dashboards and data. You've also mentioned filters and hevac equipment. Like, ultimately, when you're going into a I I hate to say typical building because I imagine in your world anything's but typical. But, um, like what? What is the physical part to this? When you're delivering an as a service model, part of that is the physical part to this. When you're delivering an as-a-service model, part of that is the deployment of more advanced products or additional products to reach a goal. What's that look like for people? What are they typically getting?

Aayush: 47:24

So, simon, here we're talking about six different parts. Okay, first is the air quality monitors, like you mentioned. Second are the differential pressure transmitter. These are the sensors that we install in the HVAC systems next to the air filters. This helps us understand the loading on the air filter how dirty is the air filter? And because we are ourselves the manufacturer of the air filter, we understand our DHC, or the dust filter. And because we are ourselves a manufacturer of the air filter, we understand our dhc, or the dust holding capacity, and we can predict when the filter needs to be changed, because a dirty air filter will not only increase the amount of mold or white actually pollute the space, but will also significantly increase the energy consumption of that HVAC system, right? So it's very important to understand the real-time dust holding capacity of that air filter. So this is the second IoT part.

Aayush: 48:20

The third IoT part is the control on the treated fresh air system. Amount of fresh air coming into the building is tricky. If we bring in too much fresh air, that building will start consuming substantial energy to just maintain the temperature, to maintain thermal comfort. If we don't bring in fresh air, from an air quality standpoint it's a problem, right? So it's a fine line that we have to walk through and hence controlling the treated fresh air is extremely important.

Aayush: 48:48

The fourth part is, of course course, the air filters. These air filters can be from a HEPA level to a MERV 13, merv 14 or an NERV 8, whatever level filters which we can possibly install in these, and these filters are installed in the treated fresh air system and the air handling units as well. The fifth, extremely important important is the third player in this entire contract. It's the financial institution that is coming in and giving us the loan for that part of your contract. Sixth probably again extremely tricky, very important is the understanding that a client or the facility manager needs to have of what all things they need to do, what is their API? This is something that we've touched upon before. Explaining and educating the client here is extremely important. So this is the sixth and very, very important part of the call.

Simon: 49:47

So there's a kind of a. There's the data part of this, the IoT, the data acquisition, the understanding, the performance. There's the physical componentry part of it which sounds like predominantly it's filters for you and client side of this, that the, the making this work, because without that, I mean it's a fundamental building block. You've got to have the money and you've got to have a client that understands their goals as well, what their, what their outcomes are. Um, from a, from a data part, then. So from the data acquisition part, um, you deploy sensors into the space, because typically, I'm guessing they don't have the sensors or the quantity of them. At the very least that you need to fully understand that space. Are these sensors and hardware that you're making and selling yourself to clients? I mean not selling them and becoming as part of air quality, as a service, but these are your own products.

Aayush: 50:56

Yes, yes, each and every SKU that I talk about or that we have is manufactured by us, and the quality control is extremely important. If the device is not calibrated right, we will lose on essential energy saving points or it might result in bad air quality. For example, a badly calibrated air quality monitor can give us wrong data. And all our algorithms, all our artificial intelligence and the machine learning algorithms that we have we have multiple patents on these algorithms that I talk about All of these will give you wrong analysis and hence it is screwed up. Junk in junk out.

Simon: 51:35

You know, it's the classic, isn't it?

Simon: 51:37

yeah, bad data in bad outcomes out the other side for sure. And I guess ultimately, because you're delivering an outcome here, you equally don't want somebody coming along as the third party and saying actually, this kpi is being missold, you know these sensors are saying the wrong thing, so you've got there's. There's two parts to this one. You need confidence in the data you're working with. The machinery of the algorithms, um, junk in, junk out. But equally you need to protect yourself that if there's third party independent assessment of a space that it aligns as much as it's going to with low-cost sensors. I mean, I appreciate there's always a limit with what you can do with the deployment scale of low-cost sensors. And again, and I keep harking back to this point, that's the fundamental difference with an as-a-service model. And that's the fundamental difference with an as-a-service model is that every part of this has to stack up, like none of this works if all of it doesn't work Right. Apache and all of these people that developed as a service models over the years is what an as a service model is. It requires, it demands every gear in the organization to do its part um, not only the components, but even the delivery and servicing of those components and and the lifespan of those. You know, everything has to function and be understood, because if it isn't, ultimately it doesn't matter.

Simon: 53:24

Like you are, it's the outcome that you're being measured on, so I think that's fascinating. So, from an air quality perspective, what are you finding you're measuring? What? What are the, the kind of parameters that are most useful? And then, from an edge case perspective, what are you finding you're measuring? What are the kind of parameters that are most useful? And then, from an edge case perspective, what are you finding yourself monitoring? And has that presented some challenges? Because you know, I think we all understand, that we can reliably measure CO2 these days. Temperature and humidity is pretty much bang on, as long as that they're located properly. Um, particulate matter is pretty good um, certainly in recent years, within the last half decade. They're all. There's some really good products delivering reliable particulate sensing as much as we can um. So I'm guessing that's the typical, and tvocs give you some indication of chemicals, but not precise um. So so there's a core of a product there, I guess in those types of monitoring would that be fair?

Aayush: 54:27

to say yeah, the six parameters that you're talking about, uh, would account for at least 85 percent of all our marketing needs. The rest, 15% might mean ozone, might need nitrogen oxide, different other formaldehydes etc. But only 85% are the six parameters which are standard for well-building guidelines and USGBC guidelines.

Simon: 54:58

And for those, I think, particularly listeners of this show. We've talked quite a lot about the difference between low-cost sensors and near-reference-grade sensors and the capabilities of this technology. I think there's a good understanding at this stage that the deployment of little white boxes that are measuring those fundamentals are pretty good. But I guess that even at that fundamental level like you say, because you've got to be so careful about, I imagine, drift and accuracy over time with these devices if you develop some fairly solid internal processes for calibration and continued monitoring of those devices, that you're what you're seeing in year four is relatively similar to what you're seeing in year one of a device because you don't want to drift.

Simon: 55:46

You know a drift of 10 or 15 on a sensor you don't want to drift 10 or 15 percent on a on a hevac system that could be catastrophic from a profitability perspective yeah, absolutely so.

Aayush: 56:00

so it's also important that uh, all the data that we are generating uh is, of course, it needs to be accurate, but having a third party come in and do the tests for us and give us a report on this annually adds to the confidence that clients also like that different certification agencies also like. So this is a general practice that we keep at Echo. There'll be a third-party lab that will come in and visit all our sites and give a third-party certification on the accuracy of our leadings, so that helps us as well.

Simon: 56:33

That's really interesting. You're doing that, yeah, okay, that's worth unpacking a little bit, actually, because I I think that's great. I was going to ask you, you know, have you found that happening? But the fact that you're actually fundamentally doing that as part of the service, um, what are the? What are those organizations coming in and measuring? Is it just are they measuring the same things that the devices are measuring and checking that you're within a tolerance, or are they coming in and doing broader sweep analysis of things like the top 10 VOCs or something like that? Are they doing some broader work or are you just focusing on are we getting reliable data out of these products still?

Aayush: 57:17

Sure, they do both, depending on what the client wants, right.

Aayush: 57:22

But, again, this is also a line item in the contract, right? So it also depends on how detailed the client is on this. It matters on that as well, right detailed the client is on this, it matters on that as well, right? For example, there's no way to measure viruses or different pathogens in the air through the kind of sensing technologies that we use at the moment. Iot systems rely on right. So for those things which we can't measure, we still need that measurement. A third-party lab can provide for that. So there are filtration systems, many advanced oxidization systems that we use for control of live organic matter in air conditioning systems and the spaces that we create. So for that we need their data generation report and for everything else that we measure, having another third party to come and give us the accurate reports, etc. Helps us in furthering our efforts in accuracy of data and our models and, of course, the client is also satisfied with that kind of open transparency of that.

Simon: 58:36

So if somebody comes in and does a third-party sweep of areas that you've got, say, low-cost sensors in, can you feed that information in and adjust calibrations then as a result?

Simon: 58:48

So if you're seeing a sensor is out for some reason, you can readjust what you're doing for some reason. You can readjust what you're you're doing because you know, because we're noticing, particularly in things like well and reset and others the certainly well has dropped the requirement for an annual test that they're now starting to rely on the calibration and I say for those not looking at the video, quote unquote calibration of low-cost sensors. Um, because we know practically it's very difficult to calibrate low-cost sensors, often in the field um. So so it's interesting for a company that actually has to stand over outcomes here that you're still leaning on an annual check of some description to keep some honesty in the in the equation that there's some benefit there these labs usually take a week to to give you the results right, and if we see some of the devices are off by whatever points, we can calibrate them on the air.

Aayush: 1:00:00

So we have ota. Yeah, and we can. We can calibrate the devices without having to bring those devices back to our uh factories. We can. Wherever they're installed, they can be installed there and we'll just recalibrate them and reboot it if you restart and start giving the right data.

Simon: 1:00:17

Yeah, yeah, and I think time will tell. I mean the challenge and I guess you've seen this as well, because you've been doing this over the last five years or so I can't remember what you said nine years, I think you were looking at this Eight years, now eight years. Yeah, the development of the technology is so fast, from a sensing perspective, that it's very difficult.

Simon: 1:00:37

What we say now almost certainly isn't going to be true in five years time, so I think time will tell with these IoT devices, but we're certainly at the point where our confidence level in some of the more basic parameters is at a point now that we trust them a lot more than we did five years ago.

Simon: 1:00:56

I mean some of the readings we were doing on pm readings five years ago was all over the place, right. But I think it will be interesting to look back in five years time and say was it false confidence or not, us relying on these low-cost sensors on their own to be reliable, and for an organization like yours that's got so much riding at stake on the accuracy of those devices that you're making the choice to say, look, you know what it's worth us while they're having that sanity check annually still to keep an eye on this. It may well be in five years' time you look back and go look, they're so closely aligned that we can make these adjustments over the air without that annual check. But at the moment your your gut is is it that we still need that? You still, you still want that process anyway in place to get it checked, I think.

Aayush: 1:01:48

I think in the future um accuracy will not be a concern um with with these low cost sensors at some point in time say seven, eight years or probably a decade later and thankfully, they'll become so affordable and smaller and you'll probably have all your IP devices which will be battery-backed so you'll never have to connect them with a cable anywhere. So I think scaling them in the future is going to be far more easier than what we're doing right now. Our devices are relatively still clunkier, larger than what I anticipate they can be. We are probably in the regular telephone era where we have landlines. So that's sort of an era on air quality monitoring where we will eventually achieve the iPhone era of air quality monitoring soon where we'll have fairly small devices or battery back, very accurate, can recalibrate themselves, um, etc, etc. I think we're moving towards that as an industry yeah, really interesting.

Simon: 1:02:48

And the other part of that um monitoring the environment part, as you said, was outdoor monitoring but also pressure monitoring. So you were looking at pressure differences either sides of filters to understand their performance over time, which I think most people can understand. Like some devices will have that, some hevac equipment will have that anyway, but I'm guessing a lot of spaces you go into may not have that. Um, but you're also talking about positively pressurizing buildings as well and understanding the pressure performance of spaces. Are you deploying pressure sensors from that perspective as well, to understand how the building is performing from a pressure perspective?

Aayush: 1:03:31

From the last three or four years. Most of the air quality monitors that we manufacture come in with a pressure sensor, so it's important to also measure pressure in real time, because that is probably the most important thing when it comes to indoor air purification and indoor quality maintenance, which, frankly, most of the people miss, because for an air filter manufacturer or an air quality monitor manufacturer, these things are often a miss and it doesn't really matter. And most of the facility managers? It's tough for them to account this data and put that into the larger scheme of things when you're looking at air quality and understand that, because of lack of fresh air, we had a negatively pressurized buildings and there was ingress of dust from full air from everywhere we could possibly have in the building and hence the air quality was bad. It makes so much sense when I say that in a sentence, but usually the data is broken and all these data are in silos, so it's tough to bring them together and analyze them together.

Simon: 1:04:34

Yeah, and that's a big part of what you're doing, I guess. And a big part of what you're doing, I guess, and a big part of your usp, is your amalgamation of this data, understanding what you want as an outcome and having to stand over it. You're developing in-house algorithms and analytics to understand building performance and I think most people understand that there's been several companies for years that have done he vac optimizing indoor air quality monitoring type approaches but this is where you physically have to stand over outcomes. You're, you're out, you you've had to develop. I'm imagining some absolutely so.

Aayush: 1:05:12

If you have ingress ingress of you have polluted air. Plus you have way more warmer air coming in from outside from an India perspective and so that's bad for your air purification of the service building business and also very bad for your energy efficiency as a service, because if you have warm air coming in from all the corners of the building, there's no way you can maintain the air conditioning system with that kind of energy efficiency that you initially imagined it to be. Again, you will not break even quickly, as quickly as you wanted to so.

Simon: 1:05:44

So you're also a software and data analytics business as well. I guess it's not just sensors and hardware and filters. You're having to provide uh platforms and desks, dashboards and, like you say, screens in foyers and things like this for people. So that's a that's a that's a big part of your business. I guess the analytics side of this and improving your product over time through data absolutely, simon.

Aayush: 1:06:12

So our platform is probably the most important part of the business. All the seven IPs that I probably touched upon earlier are a part of the platform, right? So that is the most fundamental, most important part of our business when and how we analyze data, what amount of data we analyze, what we filter out, and because all the outcomes work in conjunction to what AI asks the building to do. So this system basically sits over the existing building management system and can control the edge work remotely in real time without anyone having to do whatever. Okay, ai is very important.

Simon: 1:06:55

Do you have to have you got some kind of BMS engineers within the business as well that are integrating your systems into existing systems? Is that quite a large part of the process?

Aayush: 1:07:14

and doing all the computing there and then again telling the building what to do in a completely wireless setup. It's a challenge because every building will have different issues, especially when we're talking about taking data from archaic BMSs BMSs that were installed 20 years back and to be able to communicate, transfer that data on the cloud, do all the things that we do and then giving the input back what needs to be done right now. It is a bit of a challenge, but then again we've been able to do all of this and we are able to scale this because it is a zero person business. You don't need a human in this anywhere, completely automated. So once you integrate your systems and data pipeline to the existing building management system, you're done, you're ready to launch.

Simon: 1:08:02

And my apologies for jumping around on you, aish, but I meant to ask you earlier about the indoor air quality monitoring. We were talking about the fundamental monitoring but where you've moved into the edge case stuff, so starting to measure NO2 or sulfur-dioxide or ozones, these kind of things, although it's possible to measure them, monitor them with monitors, have you been able to find practical use for that data in the provision of air quality as a? So because I think that would be really interesting for people. You know, I think we, I think there's an awareness now that these multi-sensor devices are starting to appear that can measure things like formaldehyde and ozone and no2 and co and all sorts of things. Um, but data without purpose is just noise, and for you no more so than anybody else. So, like you've, if you've got something, you need to be able to do something with it. Have you found that's the case? Like you've been able to look at things like ozone and actually make an adjustment that makes makes a difference, or no2, or something like that?

Aayush: 1:09:13

we cannot spend any money on any hardware to generate data and not use that data for anything. It's just not possible, because as a service, I better use everything that I install and make most of it. I'll give you some examples. In NCR sorry, in the national capital region we manage certain large spaces of the news broadcasters, so these guys have very expensive equipment, right from cameras and different electronic equipments, and the levels of of so2 and no2 are fairly high in that region. So, but we did not know this. But what was happening is their pcbs and their electronics were getting shot. They were getting certain issues with them because of the presence of this, of these gases right, these create issues with electrical systems. And because that was happening, uh, we realized and the client was ready to invest, because we're talking about multi-million dollar equipment, right. So installing some air quality monitoring, which would be probably worth a few, and the client was ready to invest, because we're talking about multi-million dollar equipment, right. So installing some air quality monitoring, which will be probably worth a few hundred dollars, probably, again, a few hundred dollars on air purification, is nothing compared to the cost of the electrical systems that we're talking about, right, and we did that test and we got to know about the parameters in real time and then again took care by installing certain filters in the HVAC system, which we're able to solve for that problem.

Aayush: 1:10:41

Apart from this, another case that we've seen our systems work very, very well there's a product called NanoClan.

Aayush: 1:10:49

This is a titanium dioxide-based metal filter which has a silver nano particlearticle-based chemical which is sprayed on the aluminum metal when air passes through it. Anything which is organic in nature, be it a formaldehyde, kaolin or benzene or even some organic matters, can be treated by these filters. And the best part is, simon, that these filters have almost no air pressure, or there's no extra added air pressure, right. So we did this test in one of the buildings where the formaldehyde levels were extremely high, and we were able to showcase to the end client that if you cannot change so there's a hotel chain which just cannot change the the certain scents that they use in their spaces, right? Certain perfumes, room freshness that they use in their spaces. Like certain perfumes room freshness that they use, they just cannot change globally, unfortunately, where they're stuck right now. So they needed certain purification levels on organic compounds, so we were able to do that for them as well, really interesting and I mean it sounds absolutely fascinating.

Simon: 1:11:58

The the A big part of this and you did mention it earlier on is that you're also a filter company as well, so you have your own range of filters that you manufacture. So that must be a help that you can design and install filters to your specific requirements to get the outcomes that you want. And again, you have to stand over the quality of that product, because if you get that wrong, you're going to be replaced. You know you're going to see the pressure drop or they're not going to be as effective as they get. So you're looking at field, you're looking at the filtration of it, you're looking at the fit of them.

Aayush: 1:12:41

Everything has to work, I guess absolutely um, and and installation as right as well right. So supply, installation, testing and commissioning everything is our responsibility, end to end. If we screw up in any of these activities, I I burn my fingers in that time, so I'll lose a lot of money. So it it's important to follow the process properly.

Simon: 1:13:04

Yeah, and have you found yourself at any point getting involved in the capital equipment of these buildings as well, having to replace HEVAC units on rooftops and things like that? Or do you generally is that look, come back to us when all that's done and then we'll work with you? Is there any element of this that you start replacing equipment in buildings as a result of what you're delivering?

Aayush: 1:13:31

simon, probably someday in the future when we scale, when we can risk that kind of capital, uh, but at the moment we we request the client to take care of it themselves and get back to us whenever they're ready yeah, no, fair enough.

Simon: 1:13:43

Yeah, and I can understand why. I mean that's a big hole to, as I imagine, as interesting as it is. It's a big spend, therefore, but you know potential revenue, but it's a whole other industry. You know you've got to be good at what you're doing.

Aayush: 1:13:59

Absolutely, simon, and I really don't want to bet on someone else's hardware. To be honest, unless I'm a manufacturer, I understand the quality, I can control it. I'd rather stay away. I would not bet on anyone else.

Simon: 1:14:12

That's what we do iosh, what was your story? Um, because you've ended up in a very particular place that I guess you found yourself here for one reason or another yeah, so it's it's.

Aayush: 1:14:34

It's very strange. When all of this was happening, I never, ever, thought that I'll build a company in this place. Um, so I'll tell you what happened happened. So my family is from central India, from a place which is fairly green, very, very green, very spaced out apartments and places, so environmentally very, very comparatively compared to most of the places in the country, quite pristine.

Aayush: 1:15:03

My father moved to Delhi in November 2017, if I'm not wrong and he was hospitalized because you might know about the Indian festival called Diwali, where we burst a lot of crackers. Unfortunately, and at the same time, you have stubble burning in the north part of the country around Delhi. The air quality in November and December was extremely bad in the national capital, unfortunately, and my father got so sick he got admitted in the hospital and when I flew to Delhi from Bangalore to meet the doctor and then see my father, I was told that it was happening because of PM 2.5. And, simon, I had no idea what PM 2.5 is and the doctor was super busy. I asked him what is PM 2.5? He was like hey, man, you have a smartphone, just Google it, check it, out what you need to do.

Aayush: 1:15:57

So I Googled and I realized that air purifiers can solve for it.

Aayush: 1:16:05

But if you look at most larger oems air purifiers, they're fairly expensive, but really that's a problem and this is something which is affecting everyone. So we wanted to start. So, basically, I wanted to start the company in a space which is honest, we are very clear and transparent about what we're doing and we should deliver on that promise. So hence, uh, you know, having transparency, uh being completely accountable for what you're doing, was very, very important, because if I buy a fairly expensive air purifier and because my home has multiple spaces where outside air comes in, the air purifier is not able to maintain the air quality, the air purifier company is not going to return the money and I would never be able to understand where the issues are coming from. Hence I thought that as a service will make more sense than selling a hardware, because you might not genuinely solve the problem for the end client by selling a hardware, but if you create a solution around it, that's where we can really make things change at scale. So that's what we've been doing.

Simon: 1:17:10

And I think that's a wonderful story of the DNA of the business. So you start with that seed, but you've got to get yourself to a place where you've built the component parts necessary to deliver an as a service model. Because often as a service models come from manufacturers of a product that's usually quite expensive and complex. Realize that if they're the best in class at doing that, that there's some deeper relationship to be gained by providing this product as an as a service model. They have, you know, they've got decades of experience.

Simon: 1:17:53

You know the Rolls Royce is a good example of that, a market leading product, and saying, well, actually, rather than getting somebody to outlay hundreds of thousands, millions of pounds, euros, whatever in product, we can provide this in an as a service model. But you've kind of come at it from the ground up where you say look, I think we can deliver an outcome. I've now got to build the components to deliver that an outcome. I've now got to build the components to deliver that. So you've had to start developing sensors, filters, data analytics and software management, you know, and the list goes on. That's quite a different proposition, different, a different angle to come at it from.

Simon: 1:18:39

That's taken some time, I guess, to do absolutely right, okay if I'm going to measure air quality, how do I do it? Like what's, what's the way to do this? If I'm going to do data analytics, what kind of people do I need to do data analytics for me, like it's a totally different proposition absolutely, simon, absolutely.

Aayush: 1:19:00

I was clearly oversimplifying it, but, to be honest, we made almost zero revenue in the first two, two and a half years. It was all R&D, r&d and R&D. Before Clerco, I was part of some fairly decent hardware companies that scaled and got acquired, etc. I've been a startup founder for a while, and that, too, from an IoT perspective. I've worked with a company which made certain hardware that generated a lot of telematics data from an automotive perspective, so we sold it to an insurance company. So I was someone who spent time on hardware, so I knew a few folks who could help me out with that and also the dashboard data point when I struggled.

Aayush: 1:19:44

The few folks who could help me out with that, and also the dashboard data point when I struggled the most Simon was on the air filtration side. This was something I had zero background in. I am not from the HVAC space, do not understand computational fluid dynamic, don't understand how air purification in general works. So I spent insane amount of time on understanding those technologies and, in fact, we acquired one of the patents. The nanoclair product that I was explaining right now is a patent that we did not make from scratch. The technology was bought off from someone else yeah, interesting.

Simon: 1:20:20

So so now, now you find yourself in a position of profitability, you're scaling. You mentioned to me the last time we spoke how many square feet of buildings you're already managing. It's quite impressive. Remind listeners again where are you at as a business now, from a scale?

Aayush: 1:20:40

So we are at around 23 million square feet now as a business, now from a scale. So we are at around 23 million square feet now. Hopefully, hopefully, we'll, uh, we'll reach around 19 million square feet by the end of the financial year, march 26 for us in india. Uh, we'll have some presence uh in in the middle east and, of course, all across india and is that your focus at the moment?

Simon: 1:21:04

the Indian market and the Middle East? Is that where the focus is going to be?

Aayush: 1:21:12

Yes, but we're actively looking for partners for international growth. Our market is very tough to penetrate unless you know people there and have the kind of relationships that are required for these things. So we're also, of course, looking for partners globally, because the technology is ready. It can be scaled, provided we have the right people in the job.

Simon: 1:21:34

Yeah. So again, there's these kind of these baselines that you need scale in buildings, certainly at the moment. Is there a kind of a scale of the quality of outdoor? I mean, I guess it makes more of a business case the poorer the outdoor air quality. Like, are you able is there a kind of a what's the best way to put this? Have you been selling your product into environments where air quality is reasonable and are you able to make a business case in those types of environments? That would be interesting to understand where those kind of flaws are? Like. Is there a point at which you go look, to be honest, it's pretty good outdoors, so, like, just open the window, you'll be fine. But there must be a point at which that kind of conversation comes into play where you just start saying just bring a load of outdoor air in your buildings in a great place, um yeah so.

Aayush: 1:22:34

So, simon, I'll tell you something very interesting again. So how I look at it is um number one. Most of our clients clients want to have air purification, not only because they want to benefit from the better air quality from a wellness standpoint, but it's essentially to get those certifications, or because there's a mandate from certain company that is asking them to do this right. So it's a compliance mostly, rather than from the goodness of their hearts. Number one, unfortunately. So these companies need some sort of documentation, data, to back that number one.

Aayush: 1:23:12

Secondly, on a lighter note, if a company can maintain air quality in New Delhi across the year and it's been able to do that for the last five, six years, I think that company can maintain air quality anywhere in the world. So, yeah, I can proudly say that, and so, yeah, we are happy to work anywhere. And even in the Middle East the air quality is not that good, and we've seen we make a lot of clients who are like we don't need this. Our air quality is pretty decent. But then, of course, when we start measuring the data, it tells you the truth. The problem is because we don't have enough data.

Simon: 1:23:48

In most of the buildings, people think that the air quality is great, but it's usually not yeah, and the truth is, in a lot of spaces, a lot of the pollution is generated internally anyway, so it doesn't matter where your building is in the world.

Simon: 1:24:03

You can have poor air quality outcomes anywhere. Um, and from a and, as you say, from a compliance perspective, a lot of organizations may be looking down the barrel of something like lead or well, or something that they want to try and achieve, but just don't want the hassle and complexity of doing it themselves. So an as a service model is a model that steps in for you and says look, in a year and a half time you could be hitting these numbers. We take care of all of that for you. Um, that's what the as a service model delivers. So, as a, you know, even if they are doing it for the right reasons, it may just be this just seems too complex. So you have an organization that deals, deals with it end to end, forend for you, which is really interesting.

Aayush: 1:24:48

I mean it really is quite complex. You know, like I mentioned, there can be leakages. You have to maintain a certain steady flow of fresh air. Consequently, you need to predict when the air filter needs to be changed. If you change the filter too late, your HVAC energy bills will increase. If you change the filter too late, your expat energy bills will increase. If you change the filter too early, you're wasting your money. So it's pretty tricky, right, and there's so many things that we need to do. And again, we've been doing this for the last couple of years at scale in locations where quality is horrible, and we've been able to sort this out. So I could very proudly and confidently say that we are experts at it and we understand this probably better than most of the building managers themselves, because they have 10,000 other things to do. We only have one thing to do, that is, maintain indoor air quality, and then we do it faster than most people.

Simon: 1:25:48

So going back to kind of bring this conversation full circle, um, because there is at the moment a flaw at which, or an entry point at which, this makes sense, which means for the vast majority of the built environment, this isn't an option yet, but to me, clearly, there's some lessons to be learned here. If you were to give your top three lessons that, as a service model, has taught you as a business, in actually achieving good outcomes for companies that aren't going to go down the as a service model route you know, smaller office spaces, places that might not have the infrastructure what should they concentrate on For people that actually want to get a good outcome? What are the top three things from an as-a-service perspective that they could take away from this conversation and apply themselves? Do you think?

Aayush: 1:26:44

Sure. So there are three basics to air quality maintenance indoor. Number one have enough data on indoor air quality and if you can install an air quality monitor outdoor, that's a massive plus. Number two select the right air filter. A HEPA filter will not solve your problem in an older air conditioning system. It will just not allow the air to pass through. So you need an air conditioning system sorry, an air filter that can sit on your existing air conditioning system without massive cable costs, without having to change the motor pulley, the fan assembly etc on your air conditioning system. Selecting that fan, sorrying the air filter, can be tricky. So figure out an air filter which can have a higher NERV rating, which has a lower IPLE, that is, lower initial pressure drop. So selecting the right filter is the second most important part. And third, extremely important, is having some sort of a ventilation system that either brings in fresh air made on demand or consistently brings in certain level of fresh air. So all these three things are extremely important for this.

Simon: 1:27:59

I think that's really interesting and I think it just goes to show that data is key. You can't manage what you don't measure, um. So if you don't know what's going on in your building, then you're never going to know where you're starting from and where you're going to, and I think that's a lesson everybody can take away. And this isn't a big spend, for even small organizations can deploy very low-cost monitors that will give them a good sense of what's going on in their space, and that you don't need to be a phd to interpret some of this data. It will tell you some of the stuff could be pretty obvious where you're going, but do engage with experts. You know where you can.

Simon: 1:28:41

And then just basic fundamentals decent engineering controls, like you say, if you've got filters, just basic fundamentals, decent engineering controls, like you say, if you've got filters, make sure they're the right ones and they're serviced and maintained and delivering what they need to, and that you've got the ability to bring outdoor air in as part of that process and dilute the space from the pollutants that filters aren't necessarily going to be able to to manage um. Isn't it funny how it always comes back to fundamentals, ayush, often, and it's just what you're. Even something as advanced like an as-a-service model still has to lean on basic principles to get this right.

Aayush: 1:29:18

Always, and getting the basics right is the tough part.

Simon: 1:29:24

Yeah, absolutely. Aish, listen, thanks a million for spending the time with me today. It's been brilliant talking to you. I found personally the conversation absolutely fascinating. I wish you all the luck as a business. The more square meterage of businesses that are moving towards air quality of service, I think, the more we'll learn that are moving towards air quality of service. I think the more we'll learn If, pete, I will include your company details and things in the show notes for people who want to check you out and to get in contact with you if they want to learn any more. Aish, thanks a million for your time. Really appreciate it.

Aayush: 1:29:56

Thank you so much, Simon. This was fun. Thank you so much for having me here. It means a lot.

Simon: 1:30:00

Thanks for listening Before means a lot. Thanks for listening Before you go. Can I ask a favour? If you enjoyed the podcast and know somebody else who might be interested, do spread the word and let's keep building this community. This podcast was brought to you in partnership with Errico AECO, ultra Protect, imbiote and 21 Degrees all great companies who share the vision of the podcast and aren't here by accident. Your support of them helps them support this show. Do check them out in the links and in the show notes and at airqualitymattersnet, and don't forget to check out the YouTube channel by the same name, with plenty more content due to come on that channel. Thanks very much. See you next week.